3 Ways Smart Online Retailers Save on Shipping Fees

E-commerce definitely has advantages over brick-and-mortar retail. Online retailers don’t need to worry about maintaining real estate or negotiating leases. Plus, they can reach a wider audience since shoppers have to travel no further than their smartphone or computer to make a purchase.

But what traditional retailers have that e-commerce merchants don’t is freedom from the hassles and expenses of shipping. And shipping can quickly become the most costly and headache-inducing part of running an online business.

To save your budget (and your sanity), check out these three effective methods for saving on shipping fees.


Choose the Right Shipping Mix

Unless you sell one product that you ship to one location within one delivery timeframe, you’re going to have a few variables to consider when selecting a shipping carrier. And in order to choose the right shipping mix, you have to ask yourself these five questions first:

  • What are the average weights and dimensions of my products?
  • Are my products perishable and/or fragile?
  • Will I be shipping domestically, internationally, or both?
  • What is my budget for shipping costs?
  • Will I be shipping to residences, businesses, or both?

Start by researching the four major U.S. carriers: USPS, UPS, FedEx, and DHL. Become an expert on the rates, surcharges, policies, restrictions, and delivery options of each. A smaller business may only need to use a single carrier. But merchants who sell a wider range of products and deliver to a variety of locations will likely have to contract with multiple in order to get the best shipping rates.

Pro Tip: Consider using a smaller, local carrier since they may be able to offer you discounts the big guys can’t.


Take Advantage of Every Discount

Speaking of discounts, USPS, UPS, and FedEx all offer e-commerce retailers a variety of shipping discounts. For example …

  • FedEx Advantage®: Save up to 21% on select FedEx Express®, FedEx Express international, FedEx Ground®, FedEx Freight®, and FedEx Office® services.
  • UPS Connect: Get discounts of up to 20% on air and international shipments and 10% on UPS Ground®. Plus, you get a free year of UPS Smart Pickup®.
  • USPS Commercial Plus Pricing: High volume shippers are eligible for up to 40% off Post Office prices for select domestic and international services.

In addition to shipping discounts, you can also score free shipping supplies from USPS. And with My FedEx Rewards, retailers earn points for every shipment that can be redeemed for merchandise and gift cards.


Stay Up to Date on Carrier Rate Changes

UPS and FedEx shipping rates have increased annually for decades. But since 2008 the changes have been more considerable. Smart retailers review rate updates as soon as they are announced. This way they know how the changes will affect their shipping well before the new rates go into effect.

For example, in December 2017 the cost of some of UPS’ value-added services (such as address correction and delivery confirmation) increased by up to 18.7%. Additionally, UPS revised its dimensional weight threshold, impacting how a shipment’s billable weight is calculated.

Failing to take these changes into account leads to incurring additional charges that a retailer could have easily avoided. But by being proactive, successful retailers can adjust their shipping and packing processes sooner and, in turn, not increase their costs increase unnecessarily.

Are there any other tricks you know for saving on shipping fees? Let us know in the comments!


Author: Callie Hinman is the Content Marketer & Writer at ShipStation, the leading provider of shipping software for eCommerce fulfillment.


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